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Film incentives face uncertain future in Michigan

Film spending

The Michigan Film Office has allocated $43.2 million to nine projects planned for this year. Here are some big film projects that received state funding in recent years.

"Batman v. Superman" is expected to spend roughly $131 million in the state and hire 406 Michigan workers.

Paramount Pictures' "Transformers: Age of Extinction" (2014) was awarded a possible $20 million incentive last year and was expected to spend $82 million and hire 368 Michigan workers.

Disney's "Oz: The Great and Powerful" (2013) received about $40 million from the state after spending $105 million here. It hired 257 Michigan workers and spent about $21.1 million on Michigan crew wages, averaging $82,200 each. It spent $5.2 million on lodging, $1.3 million on food and $3.4 million on travel in Michigan.

Universal Pictures' "The Five Year Engagement" (2012) received about $5.2 million after spending $18.5 million. It hired 349 Michigan workers and spent about $4.6 million on Michigan crew wages, averaging $13,200 each. It spent $455,853 on lodging, and $227,095 on food.

HBO's "Hung" Season 3 (2011) received about $1.5 million after spending $3.9 million. It hired 117 Michigan workers and spent about $650,000 on Michigan crew wages, averaging $5,580 each. It spent $136,796 on lodging, $76,439 on food and $178,238 on travel.

If you spot the Batmobile zipping around Detroit or Superman flying past the Renaissance Center this summer, you will be witnessing the latest example of Michigan's film incentives program at work.

Filming for the Warner Bros. movie "Batman v. Superman: Dawn of Justice" recently began in Detroit after Michigan announced in August it would give the producers up to $35 million for working here. That's the bulk of the $43.2 million the Michigan Film Office has allocated to nine projects planned for this year — incentives that are intended to create jobs and infuse money into the state's economy.

While Ben Affleck and Henry Cavill fight fictional crime in Detroit, lawmakers in Lansing are waging their yearly fight over the state's budget, which could cut the $50 million incentives program by half next year. When Senate Majority Leader Randy Richardville, the program's key backer, leaves the Senate at year's end due to term limits, film workers will be left in even greater suspense over the future of Michigan's movie business.

"People will see how important it is," Richardville, R-Monroe, said. "It's really the hardworking blue-collar people in Michigan. You've got a whole lot of people that are dependent on this industry in Michigan. It would be a shame to not continue to be competitive."

In his 2015 budget proposal, Gov. Rick Snyder allocated $25 million for film incentives — a fraction of the $52.1 billion he planned in spending overall. The House also proposed $25 million in its budget draft, but Richardville led the Senate to seek $60 million. The proposed $10 million increase from this year should fund television shows that are less fleeting than movie productions, Richardville said.

The Film Office declined to comment while budget negotiations are ongoing. Lawmakers plan to finalize the budget in June.

The program received $50 million in the past two budgets and $25 million in 2012, the first allocation after lawmakers overhauled the incentives in 2011 after Snyder's election. They changed incentives from a tax credit to a direct cash refund, and reduced the cap to 35 percent from 42 percent of expenditures. That means a movie, TV series, music video or other project can get back up to 35 percent of the money it spends in Michigan after production ends.

Rep. Earl Poleski, R-Jackson, chairs the House subcommittee that oversees the incentives budget and supports a $25 million allocation next year. The program is "high-profile and glamorous and fun" and has "done some good," he said.

"The question, however, is whether government should be in the business of creating and supporting independent industries, as opposed to having those industries grow themselves," Poleski said. "Those are taxpayer dollars — hard-earned money that our taxpayers are having to pay to support someone's industry. And generally I think we should not be doing that."

Michigan distributed about $9.87 million to six finished projects in the first half of budget year 2014 — about $9.48 million of which went to the Warner Bros. movie "Into the Storm." That film created 470 jobs and spent $31.6 million in Michigan, according to a Film Office report. The other projects, which include a mobile arcade game and a web series, created 133 jobs and spent roughly $1.3 million. The jobs can last from one day to a year or more.

"Batman v. Superman" is expected to spend roughly $131 million in the state and hire 406 Michigan workers.

Michigan's competitors offer tax credits of 25 percent to 35 percent, according to a Film Office report. New York had $420 million in funding in 2013, while Pennsylvania had $60 million, with a $12 million per-project cap. Louisiana had no cap on annual spending or individual projects.

Film industry workers said there was a noticeable reduction in available jobs after the 2011 restructuring of the incentives program. Jil Szewski, an art department coordinator and assistant director from Oxford, Michigan, said she moved to Los Angeles as a result.

Szewski, 29, said she would move back if she knew more productions would come to Michigan.

"I'm always looking for the opportunity to go back there to work because it's what I know," she said. "Working as an art department coordinator, I need to be able to know where to find certain things that we'll need for filming. I know all the vendors there. I know where to find vintage parking meters."

But Sen. John Pappageorge, R-Troy, who chairs the Senate subcommittee that manages the incentives budget, said he doesn't "like how the money is used" because the incentives allow filmmakers to stay in Michigan for only a short time. He called the "Batman v. Superman" production "wonderful" but said it won't "make Michigan a center for movie making and commercial making."

"At the end of the movie they pack up, and all that stuff they brought in from California goes back to California," he said. "I'd like the industry right here."